Vail Valley Voices: China at a crossroads

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2012 may be viewed historically as the Year of the Election. Several of the world's prime powers, plus a few key regional countries, held national votes within the past 12 months. But China's "elections" have the longest-term significance.

The Chinese Communist Party elected its top leadership recently during the 18th Party Congress. The meeting's key events were the selection of Xi Jinping as China's top leader, the general secretary; premier, Li Keqiang; and the Poliburo's Standing Committee members. The entity consists of the aforementioned positions and five other members, each of whom is responsible for China's various political and economic issues. The committee also determines the country's internal and overseas directions.

Xi faces several domestic and foreign challenges:

- Addressing corruption, placating political reform advocates and streamlining the nation's economy are the first priority.

- China's relationships with the United States, Japan, North Korea and Iran are the country's secondary concerns.

How Xi responds depends upon support from his Politburo colleagues.

Reducing corruption is Xi's top domestic priority. It is a national endemic permeating the Chinese Communist Party's ranks.

The party is aware of how consternating corruption is among the public. Many party members have financially exploited their positions at the populace's expense.

A key issue is accountability. The party's ability to viably achieve it may prove difficult. The party is reluctant to establish an independent judicial branch for adjudicating corruption linked crimes. The party fears such an entity might jeopardize its governing clout, especially since its own efforts at addressing the matter have occurred with little success.

The second issue regards political reforms. The Communist Party is concerned that augmenting civil liberties such as freedom of speech may cause the party to lose control of the country. An additional reluctance exists toward allowing competing political groups to form and seek office for similar reasons. Both are principal demands among the party's critics and political reformers.

The third issue is economic. Xi needs to change the country's consumer psyche from a saving to a spending orientation. The adjustment is vital if China's monetary system is to avoid adverse consequences from the ongoing global financial crisis. The economy must develop via non-environmentally-damaging means, as has occurred over the last several years.

And finally, China's new leaders must decrease the unequal urban-rural income gap. The key to achieving those objectives is encouraging a degree of entrepreneurship, reforming China's banking system, splitting its state owned enterprises and decreasing the clout of property owners.

The least difficult issue facing China's new leaders is foreign affairs. Beijing's relations with Washington is the prime strategic concern. Both interact over several economic, East Asian and international issues. The relationship is possibly the easiest domestic-foreign issue to manage despite its complexity.

China's principal concerns are Japan and Taiwan. Any diplomatic escalation with Tokyo over the Senkaku-Dioyi islands status or an independence declaration by Taipei will immediately relegate either relationship to the apex of Beijing's foreign policy priorities.

The final tier issues regard North Korea and Iran's nuclear activities. China will closely monitor North Korea's internal affairs, especially given the country's ongoing political transition and Pyongyong's nuclear program. Beijing will probably not alter its policy regarding Tehran's nuclear program. It will continue advocating negotiations as the best means of addressing the issue.

The extent of any domestic reform will be determined by the Poliburo's Standing Committee. Its prime leaders, Xi and Li, are suspected of favoring some type of politico-economic change.

The positions of the committee's other members are debatable. Several are aligned with former General Secretary Jiang Zemin, Hu Jintao's predecessor and an opponent of in-depth changes. A few also have family, professional or business connections with various financial entities that may be adversely impacted by reforms.

Maintaining the party's control and the country's political stability are the principle fears deterring China's leaders from introducing reforms.

The Communist Party's leaders realize that avoiding, rather than introducing, reforms may exacerbate China's socio-economic-political problems. Any changes will probably occur when China's leaders believe the above scenarios are avoidable. Another possibility is an unnoticeable introduction of reforms in rural areas - reforms that are perceivably insignificant but considerable for expansion to wider regions once the party senses that reforms are implementable without losing power.

So Xi's China is at a crossroads. One path entails avoiding changes, maintaining solid political control while the public possibly resorts to widespread protests and violence. The other road includes an introduction of reforms that changes Beijing's economic, political and social infrastructures.

The next couple of years will potentially determine China's - and perhaps the world's - future for the next several decades. It is contingent upon how the reform issue is addressed.

Matthew Kennedy has a master's degree in diplomatic studies from the University of Westminster in London. Email him at intl.affairs@yahoo.com.